tonyr
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Post by tonyr on Mar 17, 2016 21:11:36 GMT
Can anyone, hand on heart, say they know, with certainty, what they will be voting for.
Well I thought I had two options: a) some vague restructuring which may or may not include interest already due, may or may not include repayments they can cope with and may or may not throw a lifeline to the borrower which may or may not enable them to continue in business. b) call in the rights due under this loan due to non-conformance So to me I know what I was voting for it was (a) some further fuzzy stuff or (b) what I'd signed up for when lending to this loan. That to me is clear. We have to claim our rights under what we've signed up for or otherwise forfeit them. That's not to say that I don't want the borrowers to succeed, I certainly do, If I get the chance to meet them I may change my mind. But until then I'll go on the information in front of me.
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Post by Butch Cassidy on Mar 24, 2016 17:28:12 GMT
New (2nd or is it 3rd) vote just arrived: I voted A as I believe reducing capital is currently most beneficial for all concerned, still think the 12% rate is a bit steep, especially as the going rate for AC loans seems to be 7-9% but I am more interested in some progress actually been made rather than quibbling over the terms. If I were to advise the borrower I would suggest investigating the possibility of refinancing away from AC as I think better terms maybe possible but here's hoping trade picks up & the business Angels prove their worth as I am reluctant to fall back onto the last remaining option of calling the loan in as that would take away not only their business but their last 30 years of hard work.
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tonyr
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Post by tonyr on Mar 26, 2016 9:38:06 GMT
I've had enough of this loan now, so I'll vote for whatever allows me to trade it soonest. To me that looks like option B as in 9 months the interest will be paid up-to-date so there is no reason why it shouldn't then be tradeable. Anyone disagree?
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Post by profunder on Mar 30, 2016 11:12:52 GMT
If this loan was reopened what discount would people offer?
Also say it was restructured at 12% amortising over 5 years - what discount would you offer then on the new loan.
Presumably it would be about the same discount level, otherwise you should vote for the one which you would offer a lower discount too
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Post by mrclondon on Mar 30, 2016 19:08:33 GMT
If this loan was reopened what discount would people offer? Also say it was restructured at 12% amortising over 5 years - what discount would you offer then on the new loan. Presumably it would be about the same discount level, otherwise you should vote for the one which you would offer a lower discount too
No, after the restructuring I'd want a much bigger discount to purchase as IMO failing to call in the loan now increases the risk significantly that the business will eventually have to be sold as non-trading entity realising less than if it was sold today. IIRC the second charge securities don't have a tremendous amount of headroom in them, so a major shortfall in the primary security realisation is likely to mean capital losses to lenders.
I can't see how the arrears even at the reduced rate can be caught up, so IMO the chances of this loan resuming trading are practically nil.
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Post by davidricketts1 on Mar 31, 2016 7:37:21 GMT
If this loan was reopened what discount would people offer? Also say it was restructured at 12% amortising over 5 years - what discount would you offer then on the new loan. Presumably it would be about the same discount level, otherwise you should vote for the one which you would offer a lower discount too
No, after the restructuring I'd want a much bigger discount to purchase as IMO failing to call in the loan now increases the risk significantly that the business will eventually have to be sold as non-trading entity realising less than if it was sold today. IIRC the second charge securities don't have a tremendous amount of headroom in them, so a major shortfall in the primary security realisation is likely to mean capital losses to lenders.
I can't see how the arrears even at the reduced rate can be caught up, so IMO the chances of this loan resuming trading are practically nil.
Intention is to trade the loan immediately (well once we've announced the second vote result and given a period after that anyway) with warnings plastered all over it. We've been fairly clear in our policy here in that this loan isn't in or heading into formal insolvency so it can be traded even with the arrears.
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Post by mrclondon on Apr 1, 2016 16:57:10 GMT
If this loan was reopened what discount would people offer?
Well based on the last 3 hours peoples' initial thoughts range from 0% to 3.5%, with as far as I can tell less than £50 actually traded.
I've just spent an hour with a calculator and a piece of paper, and concluded, well, nothing really.
If you take the bricks and mortar value of the primary security and adjust both that and the second charge security for the long run 1% pa property inflation of the postcode ( SG** ) that houses all the security, there is a fair chance that the security will just about cover the capital outstanding. Worth noting the stats show distinct falls in property valuations in that area over the last 6 months, but that may be due to an insufficient sample size to be statistically relevant.
So the discount being offered needs to reflect the opportunity cost of capital accruing interest that may not be covered. The restructuring has created an unusual situation in so far as the outstanding capital will reduce gradually as the repayments come in, thereby gradually allowing headroom in the security for some of the accrued interest to be covered.
So perhaps a relatively modest discount such as currently on offer is a valid answer. Not sure.
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Post by bracknellboy on Apr 1, 2016 17:49:16 GMT
maybe I should now trade the £5 I still have in it. I sold down sometime back but wanted to keep a small amount out of interest, and somehow it felt rude to hold on to a sum less than that. But now I regularly find myself inadvently left with or trading in femto pence I feel less of a guilt trip.
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agent69
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Post by agent69 on Apr 1, 2016 19:54:13 GMT
-4% available.
I'm almost tempted
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SteveT
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Post by SteveT on Apr 2, 2016 8:25:55 GMT
-4% available. I'm almost tempted You can now pick up almost £5k at -4.5%! That said, the vast majority seem in no particular hurry to sell out; £123k of the £137k available is at par.
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agent69
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Post by agent69 on Apr 2, 2016 9:03:13 GMT
-4% available. I'm almost tempted You can now pick up almost £5k at -4.5%! That said, the vast majority seem in no particular hurry to sell out; £123k of the £137k available is at par. I guess this may end up a bit like Ratesetter, with people undercutting each other trying to get to the top of the list.
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kermie
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Post by kermie on Apr 2, 2016 9:17:56 GMT
Someone got a "bargain" and nabbed the £5k-ish at -4.5%.
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sl75
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Post by sl75 on Apr 2, 2016 17:48:18 GMT
Someone got a "bargain" and nabbed the £5k-ish at -4.5%. Either that or the seller changed their mind and cancelled the order? (the "bargain" seems more likely though)
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Post by mrclondon on Apr 2, 2016 19:35:25 GMT
Thank-you to everyone that has nibbled through my £2k @ -3% during today. All gone now.
As my post yesterday suggested I really can't get my head round what fair value is for this loan at present. My gut feel is a 3% discount (equivalent to forgoing 3 months interest) isn't a bargain for the buyer, but equally I wouldn't have been comfortable offering the 4.5% discount that someone did, and I had no intention of entering into a race to the bottom last night.
For me a 12% yield even if it is eventually paid (or is recovered) is totally inadequate for the risk. Once the Oct/Nov 2015 arrears are cleared in a couple of months time, there will be no further interest payments received for several months. So unlike 12% loans on other platforms there is no compounding of the interest.
I'm obviously very happy to have retrieved 97% of the capital so quickly (and which will shortly be earning 12% in other loans), I just hope the various buyers have entered into the transaction with their eyes wide open.
PS I may be back in the market as a buyer if the discounts reach 20%.
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Post by mrclondon on Apr 2, 2016 20:06:15 GMT
Is anyone willing to admit buying at a 3, 4 or 4.5% discount ?
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